Experts finishing up collision study

Posted: Tuesday, March 04, 2008

ATLANTA - House Speaker Glenn Richardson unveiled his retooled tax plan Tuesday, one that no longer calls for replacing school property taxes on homeowners with an expanded consumer sales tax. Nor would it bring back the statewide sales tax on groceries.

What it would do, however, is eliminate the car-tag tax over two years, limit property assessments to modest annual inflationary increases, restrict the growth of local spending to the inflation rate and impose a $10 fee per vehicle to help fund a statewide trauma-care network.

Richardson, R-Hiram, presented the idea first to the House GOP Caucus, then took it to the House Rules Committee, which scheduled the package for debate by the full House today.

Richardson called the plan the largest tax cut in state history, and it cleared the Rules Committee on a loud voice vote of approval.

The previous version of Richardsons plan, nicknamed the GREAT Plan, was a package of two constitutional amendments and one statutory change that would have eliminated the car-tag tax, shifted the school property tax on homesteads to an expanded sales tax, eliminated back-door tax increases caused by unrestrained property reassessments and limited the growth of local government spending to rein-in front door tax hikes.

The proposal was hugely controversial, particularly among city, county and school officials.

Last week, Democrats announced they would oppose the package - a huge blow since Richardson needed some Democrat support for the plan to reach the super-majority 120 votes to pass. In addition, a caucus whip count showed he could not count on all Republicans to stand behind the proposal.

The latest revision still contains aspects that will annoy local officials, who flocked to the Capitol last week to express their opposition to a number of aspects of the earlier measure, including the one to restrict spending growth. That remains in the latest permutation, and Senate President Pro Tem Eric Johnson said the restriction could be a major sticking point.

Other than that, however, he said he would reserve judgment. "The GREAT plan started changing every couple months, then it started changing every couple weeks, then every day, now its changing by the hour. I dont see any need for the Senate to comment on it til it gets off the floor, because itll probably change some more on the floor."

As Richardson outlined the proposal Tuesday morning, half of the tag tax will be eliminated by 2010 at a cost of $329.5 million. The tax will be fully eliminated 2011 at a total cost of $672 million.

The vast majority of that money goes to local governments. Richardson said the state would make every government whole and vowed no entity would lose a penny.

There would be no new revenue stream to help state government offset the huge cost. Legislators said Richardson is counting on normal increases in state revenues over time to absorb the expense.

County tax assessors could increase residential property up to 2 percent a year and non-residential up to 3 percent a year.

In overall taxes and fees, local governments only could collect their total revenue from 2008, plus the governmental inflation rate - which has averaged 5.05 percent over the last five years.

Local governments wishing to increase spending above the inflation rate could do so, but only with voter approval in a referendum.